Hong Kong Mandatory Provident Fund Schemes Authority launches consultation on MPF full portability with annual transfer option and designated ERMC account

The Hong Kong Mandatory Provident Fund Schemes Authority (MPFA) opened a one-month public consultation on proposals to implement full portability of Mandatory Provident Fund (MPF) benefits, aimed at allowing scheme members to transfer more benefits derived from mandatory contributions to an MPF scheme of their choice. The MPFA plans to submit recommendations to the Government after gathering feedback. Under the proposals, employees who start employment on or after 1 May 2025 would be able to transfer once a year the entire MPF benefits derived from employer mandatory contributions (ERMC) for the current employment from the employer’s scheme contribution account to a personal account in a scheme of their choice, aligning with the existing Employee Choice Arrangement model. For employees who started before 1 May 2025, the MPFA proposes a new “designated ERMC Account” to enable annual transfer of the full ERMC for the current employment while preserving the operational ability to use ERMC to offset severance payment or long service payment attributable to employment before 1 May 2025; once implemented, the MPFA estimates freely transferable vested benefits would rise from over 70% to nearly 100%. Feedback is due by 28 April 2025. The MPFA noted that the “existing employee” proposal may require more legislative amendments and system support work than the “new employee” proposal, and phased implementation may be considered.